A far-reaching settlement was announced Tuesday in a long-fought sex discrimination case against State Farm Insurance Co., allowing women who believe they were unfairly denied jobs as sales agents to seek millions of dollars in damages.
The agreement represents the "largest potential monetary recovery" in the history of the federal Civil Rights Act of 1964 and could cost the company up to $300 million, said Guy T. Saperstein, an Oakland attorney for the plaintiffs in the 9-year-old case.
However, M. Kirby C. Wilcox, a San Francisco lawyer for State Farm, called Saperstein's claim "totally unsupportable" and "highly speculative."
To even approach the result predicted by Saperstein, the vast majority of more than 1,000 potential claimants would have to show that they were denied jobs in favor of less-qualified male applicants, Wilcox said.
The settlement, tentatively approved by a federal judge, covers women who sought and were denied 1,113 sales agent jobs at State Farm from July, 1974, to December, 1987.
Under its terms, the company for the next 10 years will set aside 50% of new agent jobs in California for women--the same hiring quota that the company has been applying in this state for the last two years. Such jobs frequently pay more than $75,000 annually, according to lawyers in the case.
The agreement also provides nearly $1.3 million in damages to be shared equally among the three rejected applicants who brought the class-action suit--Muriel Kraszewski of Long Beach, Wilda Tipton of Oxnard and the estate of Daisy Jackson of Palo Alto, who died in 1983.
Kraszewski claimed she was denied a sales job in 1975 after 12 years of service with State Farm as a secretary, office manager and other positions in which she performed nearly all the functions of an agent.
"They told me I had to have a college education and that I had to relocate and that my husband had too much control over me," she said in an interview Tuesday.
"Most male agents I knew did not have a college education and had never been required to relocate . . . and (company officials) had never even met my husband," she said.
Kraszewski filed a complaint with the federal Equal Employment Opportunities Commission in 1975 and four years later joined the others in a federal lawsuit.
At present, she said, she works as an agent for another company. "I don't think women have any trouble selling insurance," she observed.
The agreement was announced nearly three years after U.S. Dist. Judge Thelton E. Henderson ruled that the Illinois-based company had violated federal job-bias laws by discriminating against women in recruiting and hiring sales agents in California.
In 1974, women held only two of 1,454 agent jobs for the firm in California and only 65 of 1,847 such positions by 1981.
The agreement averts the need for a second phase of the case to determine the amount of damages to be paid to victims of discrimination. The pact still must receive final approval at a hearing before Judge Henderson, now scheduled for March 15.
Announcement of a settlement came after what attorneys said was 15 months of intensive negotiations.
In addition to the hiring quota and the monetary award to the three plaintiffs, the agreement sets up an elaborate procedure for processing claims of women who believe they were victims of discrimination by the firm.
Among other things, claimants must pass a state examination for insurance agents and show they were denied a sales position during the period covered by the suit. In turn, the company will have the opportunity to rebut claims of discrimination by showing that in each case the firm hired a better-qualified male applicant.
Unresolved disputes will be submitted to a special master in the case to determine eligibility for an award and the amount of damages, which may range from $15,575 to $420,822, plus interest, per applicant.
Agreement Called Fair
Wilcox, the attorney for State Farm, called the agreement "comprehensive and fair under the circumstances," saying that the firm preferred to settle the matter now "to avoid the expense of protracted litigation."
He said it would be highly unlikely that rejected female applicants would prevail in the substantial majority of claims involving the 1,113 sales jobs in dispute in the case. During the period at issue, women comprised less than half of the overall work force and thus would have more difficulty proving discrimination, he said.
Saperstein, the lawyer for the plaintiffs, said he expected a "large number" of claimants to emerge in coming weeks. Claims must be filed during a four-month period that ends Aug. 31, he said. The attorney said also that State Farm deserved credit for taking "great strides" to include women in its sales force in recent years. "Women agents are reportedly doing very well," he said. "We know now that women can sell insurance as well as men."
A company spokesman at the firm's headquarters in Bloomington, Ill., said that of the 16,318 agents State Farm employs nationally, 2,955 are women or minorities. Of 2,502 agents hired since 1980, 2,418 are women or minorities, he said.